Russian troops are on
the move, pushing into two regions of separatist-controlled Ukraine and
threatening to invade the rest of the country. But there could be some serious
collateral damage to the U.S. and its allies.
In particular, the
sanctions could hit an auto industry already struggling to cope with the impact
of COVID, semiconductor shortages and other so-called “black swan” events.
President Joe Biden is
rolling out an array of what one observer has called “the mother of all
sanctions” against the heart of the former Soviet Union. Those measures are
meant to convince Russian President Vladimir Putin to step back by crippling
his country’s already weak economy.
automakers are expected to face serious challenges, both due to restrictions on
foreign parts purchases and Russia’s access to the international monetary
transfer system, SWIFT. The Gaz Group, which produces commercial vehicles,
buses and auto parts, has warned it may have to shut down due to sanctions.
And a number of
foreign-owned automakers, such as Toyota, Volkswagen and Renault, will be hit,
as well. Stellantis has a large presence in Russia. Its plant in Kaluga, about
115 miles from Moscow, has been growing as an export base and now supplies the
Peugeot Expert, Opel Vivaro and Citroën Jumpy vans for export to Europe and
other markets.
Volkswagen, as well as
Renault-controlled Avtovaz, said they are studying the situation and have yet
to determine what actions they will need to take.
Ironica Russia is also
the world’s third-largest source of nickel, a metal critical to lithium-ion
batteries.
The two largest US
automakers won’t feel a direct hit from sanctions. General Motors started
pulling out of Russia in 2015 and the same year Ford announced plans to leave
the market.
Russia is also the
world’s third-largest source of nickel, a metal critical to lithium-ion
batteries. Ironically, shortages of the metal could short-circuit the plans
laid out by the Biden administration calling for 50% of the vehicles sold in
the US by 2030 to be battery powered.
Source: The
Detroit Bureau
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